Tax filing season is here, and one of the most common questions we hear is:
“Do I need to declare this income?”
Most taxpayers know they need to declare their salary, but things become less clear when money starts coming in from other sources. Whether it’s a side hustle, rental property, investment income or occasional freelance work, SARS expects you to include it in your tax return.
Let’s unpack what generally falls under the category of “other income”.
What is "Other Income"?
In simple terms, other income refers to money you earn that isn’t part of your normal salary.
While every taxpayer’s situation is different, common examples include:
Freelance or Consulting Income
Doing work on the side? Income earned from consulting, freelancing, contract work or other self-employed activities need to be declared.
This includes everything from graphic design and marketing services to bookkeeping, tutoring and professional consulting.
Side Hustles & Small Businesses
Selling products online, running a weekend business, offering services after hours or earning money through social media activities can all create taxable income.
Even if the income isn’t your primary source of earnings, it still needs to be included in your return.
Rental Income
If you earn money from renting out a property, SARS requires you to declare that income. Rental income includes income received in the form of short-term rentals (AirBnB, Booking.com. LekkeSlaap) or long-term rentals (monthly tenants).
You are allowed to deduct any qualifying expenses related to earning rental income, which helps in reducing the tax liability. Qualifying expenses include any and all expenses that YOU as the landlord pay on behalf of the tenant. This can include rates and taxes, levies, repairs and maintenance, internet, and finance charges.
Capital Gains
If you sold a fixed asset during the financial year, you need to declare the capital profit or loss to SARS.
This can include assets such as a rental property, shares, unit trusts or even your primary residence. However, special exclusions and exemptions may apply, particularly when selling your primary home.
The amount subject to tax is generally the profit made on the sale, rather than the full sale proceeds. If you’re unsure whether a transaction triggers Capital Gains Tax (CGT), it’s worth seeking professional advice before submitting your return.
Investment Income
Certain forms of investment income may need to be declared, including:
- Interest earned on savings or investments
- Dividends (depending on the circumstances)
- Capital gains from the disposal of investment assets (for example, the selling of shares)
Different tax rules apply to different types of investment income, so it’s important to understand how they are treated.
Foreign Income
If you’ve earned income outside South Africa, you need to disclose this to SARS.
The tax treatment can vary depending on factors such as the type of income, where it was earned and whether any tax treaties apply.
What Happens If You Leave It Out?
SARS continues to improve its data-matching capabilities and receives information from a growing number of financial institutions, employers and third parties. Failing to declare income could result in:
Additional tax assessments
Penalties and interest
Delays in processing your return
Further engagement with SARS
When in doubt, it’s always better to ask the question than assume something doesn’t need to be included.
Tax Season Is a Good Time for a Financial Check-In
While tax season is often viewed as an annual compliance exercise, it’s also a useful opportunity to review your finances.
If you’ve started a side hustle, purchased an investment property, changed jobs, begun investing or started earning income from new sources, your tax obligations changed too.
Taking the time to understand your income streams now can help avoid surprises later.
Need Help?
If you’re unsure whether a particular source of income needs to be declared, our team can help you navigate the process and make sure your return is filed correctly.
A quick conversation now could save you time, stress and unnecessary SARS queries later.
